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Info Service on WTO and Trade Issues (May25/30) Geneva, 28 May (D. Ravi Kanth) — The World Trade Organization’s Director-General, Ms Ngozi Okonjo- Iweala, has floated the idea of “a Member-nominated Eminent Group of politically aware persons to think with Ministers and the General Council of solutions to the challenges” pertaining to how the organization needs to be reformed, on grounds that “a large number of reform issues require political will to solve them.” “After years of trying,” the DG said, “Ambassadors have been unable to deliver on these reforms,” leaving issues to “fester.” “Therefore, Ministers must weigh in on how these problems would be solved beyond Geneva or with a process that supports Geneva,” she suggested. The DG’s ideas, contained in an annex attached to a restricted document (Job/TNC/127) on the “Revised Road to Yaounde MC14 – Possible Modalities, Substance and Way Forward”, seen by the SUNS, seem more like a “top- down” approach on WTO “reforms”, aimed at addressing the concerns raised by the Trump administration in its “America First Trade Policy”, said a trade envoy, who asked not to be quoted. The US Trade Representative’s Trade Policy Agenda for 2025 has emphasized that “going forward, the United States will continue to look for new avenues to make the WTO more relevant and viable in light of the realities of today, but it will do so with an appreciation that meaningful reform will require participation by other Members, including those that have benefited from the failure of the WTO to fulfill its objectives.” Yet, the US appears to be averse to the DG’s idea of establishing an eminent group of “politically aware persons” at this juncture while raising concerns over outsourcing work to people outside the WTO, the trade envoy said. There also appear to be grave doubts over the utility of WTO reforms when there is little or no guarantee that Washington will address its specific concerns with countries at the WTO, following its extraction of tariff reduction commitments from countries in an allegedly “coercive and predatory” framework since the announcement of its “reciprocal” tariffs, said people familiar with the development. WTO REFORM In her commentary on “WTO reform topics/themes”, the DG said that she “received feedback suggesting that the Reform Facilitator begin consultations with Members to identify the key reform topics, rather than immediately focusing on the examples listed in the matrix.” As reported in the SUNS, the DG, in presenting the topics or themes in the matrix, suggested that they “are merely examples based on what I have heard from Members during my consultations, as well as discussions at various levels and in capitals since I assumed my role as Director-General.” Ms Okonjo-Iweala said that she “received feedback cautioning that reform discussions should not be expanded into contentious areas, where Members may have differing interpretations of what “reform” entails.” “This includes concerns about potentially altering the organization’s fundamental character, its decision-making processes, its scope, or even exacerbating vulnerabilities for developing Members,” she pointed out. The DG wants members to go through a process questioning “what isn’t working, why is it not working and how do we fix it?”, saying that “there should be no sacred cows.” She said that “it is precisely because areas that do not work have been ignored or swept under the carpet for so long that led to the situation the organization finds itself today.” According to the DG, “many Members noted that this is the opportunity to have an honest conversation and fix these issues.” Echoing her constant refrain for WTO reforms since she took office in March 2021, the DG argued that “in today’s environment, we can no longer afford to overlook the key challenges.” Elaborating on these “key challenges,” Ms Okonjo-Iweala said they “include unfair trade practices/level playing field issues, approaches to policy space for developing Members, tariff escalation that penalizes value addition, outdated rules, unfulfilled ministerial mandates and a hobbled dispute settlement system.” “We also cannot shy away from addressing a decision-making process that hinders progress – one that stymies Members’ ability to capitalize on emerging opportunities,” she emphasized, in apparent reference to calls for doing away with the principle of consensus-based decision-making, as enshrined in the Marrakesh Agreement that established the WTO in 1995, said several people who asked not to be quoted. The DG appears to have thrown a challenge to the members by arguing that “if we are genuinely committed to preserving so much that is good about the organization – and I have yet to hear anyone challenge that goal – then our reform efforts must be equally sincere and proportionate.” “The process of confronting tough issues may be uncomfortable at times, but it is a necessary investment to create a stronger, more resilient, and more responsive organization,” she said. NEGOTIATING FUNCTION The US, which is seeking differentiation among developing countries for availing of special and differential treatment (S&DT), has highlighted the WTO’s negotiating function in its Trade Policy Agenda for 2025. Responding to this issue, the DG said: “Let me highlight that under the sub-bullet on negotiating function reform, I have deleted the phrase “developing country Member status” to clarify that the issue is not about depriving Members of their right to designate their development status.” “Rather, as I heard from Members, the issue lies in Members’ assumption of commitments arising from negotiations, which includes the matter of Special and Differential Treatment (S&DT), among other issues,” she said, adding, “I hope this provides the necessary clarity”. In what appears to be an attempt to accommodate the US insistence on using the national security exception, the DG said, “there was also the suggestion to add GATT Article XXI – the National Security Exception – to the list of examples under the sub-bullet “How to ensure that current WTO agreements remain dynamic and relevant (e.g. ASCM, TRIMs, TRIPS, among others)”. She wants members “to be open and constructive if we are to ensure the system remains fair, balanced, and effective.” Ms Okonjo-Iweala urged members “to avoid getting stuck on the starting blocks – bogged down by debating instead of identifying issues.” The DG said that members must “focus on scoping the issues, and formulate the key questions that we all know need to be addressed,” so that their respective ministers can “either endorse them or provide further guidance, if necessary.” REFORM DISCUSSIONS The DG stated that she received feedback from trade ministers at “MC12 [WTO’s 12th ministerial conference in Geneva in June 2022] and MC13 [WTO’s 13th ministerial conference in Abu Dhabi in March 2024]” that “reform discussions should take place in the General Council and within the respective Committees and WTO bodies and that given this, there is no need for a centralized, facilitator-led discussion on WTO Reform, nor is there significant value in outsourcing Members’ work to external experts, which has not been successful in the past”. However, she said that “it is clear that a large number of reform issues require political will to solve them and after years of trying, ambassadors have been unable to deliver on these reforms. Instead, issues have been left to fester.” “Therefore, Ministers must weigh in on how these problems would be solved beyond Geneva or with a process that supports Geneva. This is the idea behind a Member-nominated Eminent Group of politically aware persons to think with Ministers and the General Council of solutions to the challenges,” Ms Okonjo-Iweala maintained. She said that it is “only an idea”, and that “Members should come up with suggestions on modalities that can deliver solutions, not debates.” +
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